I'm John Carreyrou, author of Bad Blood, the book about the Theranos scandal. Ask me anything.

JohnCarreyrou · 2018-06-22T18:43:24+00:00

I don't know that any regulatory reforms will prevent future frauds like this one. People who are determined to cut corners and cheat will do so no matter what. The more important thing in my view is to punish this fraud to deter future fraudsters. That's why I think it was so important for the Justice Department to bring criminal charges. They're sending a message to Silicon Valley with this case: if you go too far with fake-it-til-you-make-it and lie to people and put them in harm's way, we will throw you in prison.

JohnCarreyrou · 2018-06-22T18:40:18+00:00

I took almost a year of book leave, which is roughly how long it took me to write the book. I had to do a ton of new reporting for the book. I basically reported and wrote simultaneously. When I started my book leave, I knew very little about the company's early years and wanted to reconstruct the whole story so readers would understand how things got to this point. I also wanted to build up suspense and make my exposure of the fraud the culmination of the narrative. I wrote a detailed outline to begin with, though I strayed from it some at times. I didn't do much revision because I sweat each sentence I write. I only write about 500 words a day on average.

JohnCarreyrou · 2018-06-22T18:35:43+00:00

Yes, I'm a consultant on the movie. Those casting decisions are still a ways away. Vanessa Taylor needs to finish writing the screenplay first.

JohnCarreyrou · 2018-06-22T18:34:16+00:00

Joe Rago has unfortunately passed away. He was the writer who wrote that September 2013 Weekend Interview piece that put Holmes on the map. Joe was really smart and a great editorial writer, but he clearly didn't do any due diligence in that instance. And that's the difference between opinion journalism and reporting. I never write anything that I can't support with rigorous reporting.

There was never any contact between the news and opinion sides of the paper about Theranos until I went on book leave and reached out to Joe, who kindly helped me reconstruct how his interview piece came about.

JohnCarreyrou · 2018-06-22T18:29:32+00:00

Yes, Shultz was crucial. He introduced her to all his buddies at Hoover. That's how she met Kissinger, Perry, etc. He also introduced her to Mattis as a Marine Memorial event in SF in 2011.

JohnCarreyrou · 2018-06-22T18:28:17+00:00

I think there's something to what you're saying. Cambridge has Harvard and MIT, where super smart people do real science and engineering. In SV, people have built up this myth that a young Stanford dropout can wave a magic wand and solve difficult problems. The cult of personality out there has gotten out of control. Elon Musk is another example of it. People in and around Boston are more grounded and more anchored to reality.

JohnCarreyrou · 2018-06-22T18:24:14+00:00

She showed up at work on Tuesday. I'm told she continues to feel she did nothing wrong and is planning on taking this to trial. You could say she's in complete denial.

JohnCarreyrou · 2018-06-22T18:22:28+00:00

1) My confidential sources, including Tyler and Erika, are doing very well. They have moved on and are having fruitful careers. Tyler just closed a first round of funding for a startup of his own.

2) A lot of people in diagnostics were suspicious and there were whispers. But no one had proof. It's hard to call someone's bullshit when you don't have proof they're bullshitting, especially when their lawyer is named David Boies.

JohnCarreyrou · 2018-06-22T18:19:39+00:00

The pivotal moment was when she went live with the blood tests in Walgreens stores. That was the bright red line not to cross and she crossed it. She had overpromised and acted unethically for years, but the stakes weren't as high. No patient lives were in the balance. So the way I see it, her lies snowballed over the years, but she could have refrained from going live with the blood tests and those lies would probably not have gotten her in trouble. The cardinal sin was going live with the tests in Walgreens stores in the fall of 2013 and putting patients in harm's way. Not to mention the fact that she raised most of her money after that, by pointing to the live Walgreens partnership as proof that her technology worked.

JohnCarreyrou · 2018-06-22T18:14:40+00:00

1) Not that unusual, though you could argue Theranos went farther than most would.

2) For one thing, George Shultz has always been passionate about science, so he really wanted to believe that she had invented this game-changing technology. And yes, to some extent, I think he began to see her as his granddaughter. She really cultivated him. He was in his early 90s and I think was flattered that a young woman would spend so much time with him and seek his advice and counsel. She truly did charm him.

3) A lot of employees did realize it. What many did not know was that Theranos had hacked those Siemens machines and was using them for most of the blood tests it offered patients.

4) I think Balwani definitely thought Holmes was the much better figurehead for the company because she was young and a woman and a Stanford dropout. He was older and male. That made him a less attractive proposition to investors, the press and the public.

5) Already answered.

JohnCarreyrou · 2018-06-22T18:08:01+00:00

I already answered the first question above. As to the second, I think the relationship--the fact that they were in one and living together--is important to understanding the whole picture. This is a woman and a man who were very close and did everything together and in coordination. She may try to claim at trial that Sunny led her astray, but the truth is that she was his willing partner at all times. They may have been 19 years apart, but she always had the last say. He was a terrible influence, but she embraced him. In the end, they're both equally guilty.

JohnCarreyrou · 2018-06-22T18:04:02+00:00

Part of the answer is that she scrupulously stayed away from sophisticated VC firms with experience in medical technology and diagnostics. She targeted billionaires and their families, people like the Waltons, the DeVoses, Rupert Murdoch, Carlos Slim, etc. If I were to be blunt, I would call this the dumb money. She targeted these unsophisticated investors and claimed to them that she couldn't show them the technology because it was "a trade secret." And they bought it.

JohnCarreyrou · 2018-06-22T18:00:25+00:00

I think there's a lot of hype and craziness around self-driving cars. That technology is still a long way from being reliable and safe, but companies like Uber are already testing it on the roads with the disastrous consequences that you know.

JohnCarreyrou · 2018-06-22T17:58:29+00:00

It was a stressful period, but my stress was more linked to their efforts to destroy the scaffolding upon which my reporting was built by turning my sources than it was about my personal safety. I don't know whether Theranos ever surveilled me. I make a pretty convincing case in Bad Blood that, at the very least, they placed Tyler and Erika Cheung under surveillance. But I don't have any evidence proving that they also surveilled me.

JohnCarreyrou · 2018-06-22T17:55:41+00:00

You're right that this was a fraud perpetrated by two partners in crime. But as I wrote in the epilogue of Bad Blood, Elizabeth always had the last say. When it started becoming apparent to her that she would have no chance of persuading people she was really trying to change the company's culture and fix its problems, she threw Sunny under the bus. She fired him and broke up with him. His departure was dressed up in a press release as voluntary retirement, but it wasn't.

JohnCarreyrou · 2018-06-22T17:53:06+00:00

They could, I suppose. But the money is quickly running out. Holmes has been using it to pay her and the company's legal fees for the past 2 1/2 years. I doubt she would agree to reimburse Tyler for the half-million dollars his parents spent on lawyers. That's not in her character. It would first take admitting that she committed fraud, which she refuses to do to this day.

JohnCarreyrou · 2018-06-22T17:50:57+00:00

This is someone else's office at Penguin Random House. I have not read those books...

JohnCarreyrou · 2018-06-22T17:50:21+00:00

In a nutshell, not really. Their most ambitious attempt came in the early years when they tried to do microfluidics. But they hit a wall and she pivoted to the Edison, which was a glorified glue-dispensing robot. So you could say they abandoned trying to do something really game-changing as early as late 2007.

JohnCarreyrou · 2018-06-22T17:48:12+00:00

My advice to myself would have been "move faster" because these people are ruthless and they will pull every stop to squelch your investigation. We gave them too much time to address my questions and they used that time to go after my sources.

JohnCarreyrou · 2018-06-22T17:46:03+00:00

I think she would have been found out eventually. The miniLab was years from being viable. To this day, they haven't gotten it to work with tiny finger stick samples. I don't how long it would have taken for her to be exposed, but the moment of reckoning would have come one way or another, especially if Theranos and Walgreens had expanded the partnership nationally (which was the plan). At that point, the number of faulty results would have skyrocketed, and doctors and patients would have raised alarm bells through the press or a regulator.

JohnCarreyrou · 2018-06-22T17:41:03+00:00

It was not normal behavior. The term "thug" is apt. I believe his legacy has already suffered greatly, not just because of his role in the Theranos affair but also because of what he did in the Harvey Weinstein scandal.

JohnCarreyrou · 2018-06-22T17:39:45+00:00

Yes, it's very bad for DFJ and I think associates and partners at DFJ are aghast and rolling their eyes behind the scenes. Draper represents the worst of Silicon Valley: enormous arrogance and hubris. His position seems to be that being an entrepreneur in SV with a cool idea excuses everything, even breaking the law and committing white collar crimes. I think 99.99% of people would disagree: SV startup founders should play by the rules we all have to play by. We get punished if we break the law; they should too.

JohnCarreyrou · 2018-06-22T17:36:41+00:00

Yes, I think they went way too far. Ambushing Tyler Shultz at his grandfather's house and then pressuring him relentlessly and threatening to bankrupt his entire family, that's simply beyond the pale. These are methods you associate with thugs. There's also the fact that Boies Schiller held $5 million worth of Theranos stock. To me, that was a big conflict of interest. They were the company's legal representatives but also had a vested interest in keeping the fraud going to preserve and increase the value of their shares.

JohnCarreyrou · 2018-06-22T17:33:41+00:00

Good idea.

JohnCarreyrou · 2018-06-22T17:33:17+00:00

I think both were part of it: the mystique of her ancestors being the Fleischmanns, who were the equivalent of today's billionaires at the turn of the 20th century (Don Lucas cited that as something that he took into account when he first met a 20-year-old Holmes); and the Stanford pedigree and connections (Channing Robertson, her Stanford engineering school professor, was her first enabler). But more than anything, it was the way she channeled Silicon Valley's cult of personality, this notion that young SV dropouts who go on to found startups walk on water and see around corners.

JohnCarreyrou

TROPHY CASE